On serious ill health retirement (where the member has been diagnosed with less than a year to live). The scheme should allow you to take your benefit from the scheme as a tax free lump sum, however they are likely to retain 50% of the fund to provide a spouses pension and this is often not an option because your employer may be insistent on early retirement before a life expectancy can be confirmed by your doctor.

A defined benefit scheme will usually pay a 50% spouses pension on the members death which means that if the members life expectancy is short, the member will only benefit from the full pension for a short period and the spouse will then only receive 50% of the fund benefit.

If no tax free cash and no income is required, in the short term, transferring to a personal pension would allow a full tax free refund of 100% of the fund value, to the spouse, on the members death.

Therefore potentially doubling the spouses future income.

If income is required, you can take some or all of the tax free cash amount to be used as income in the short term, leaving upto 75% of the fund available for the spouse on the members death (further income could still be drawn, if required, without having to purchase an annuity and losing its capital value).

Therefore on ill health retirement, careful comparisons between the benefits of the defined benefit scheme and a defined contribution scheme should be undertaken and discussed with an independent financial adviser at the earliest opportunity.

Employers with fewer than 50 employees will start having to auto enrol their eligible employees into an eligible pension scheme from 1st April 2015

Who will this apply to?
• An employee who is aged between 16 and 74
• An employee who works in the UK
• An employee for whom you deduct income tax and National Insurance contributions from their wages.

All employers will be required to register their business with the Pensions Regulator

Employees will have the right to opt out, within 1 month after they have been automatically enrolled in order for any contributions made to be refunded.
Any employee who has opted out will need to be automatically re-enrolled again every 3 years, if they are still working for you

Employers Minimum Contributions
Staging date to 30th September 2017 – 1%
1st October 2017 to 30th September 2018 – 2%
1st October 2018 – 3%

Some things an employer will need to do…….

Set up a qualifying scheme;
Understand the different criteria defining a qualifying scheme,
Identify eligible workers and jobholders;
Understand when to auto-enrol eligible jobholders;
Auto-enrol eligible jobholders at the appropriate time;
Adapt their payroll systems;
Know when their staging dates are;
Understand the information requirements;
Understand the timing of the information requirements;
Understand the employer choices about when to automatically enrol;
Register with the Pensions Regulator at the right time;
Re-register with the Pensions Regulator at the right time;
Inform eligible employees of their right to opt-out;
Re-enrol those who opt-out at the correct time;
Refund the contributions to those who opt-out in the opt-out window;
Keep records for at least six years of all actions and outcomes;
Inform postponed jobholders within one month of the original date;
inform jobholders the date that they will be enrolled into the scheme;
contribute at least a minimum amount towards their employees’ pensions;

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Insurers have always considered this acceptable practice because men & women differ from an “insurance risk viewpoint” as women tend to live longer than men but also tend to have a higher potential for longer term illness than men.

Although we don’t know yet how insurance companies will ultimately work around these new rules,  in principle we would expect:-

• life insurance premiums for women to rise in cost and for men to reduce
• Income protection premiums for women to reduce and for men to rise
• Annuities rates to improve for women and worsen for men

• Common disorders such as depression and anxiety
• Post traumatic stress
• Obsessive compulsive disorders
• Eating Disorders
• Post Natal depression
• Phobias
• Personality Disorders
• Bipolar disorders
• Schizophrenia

Mental health conditions are now the main cause of long term absence from work causing 47% of absences in manual workers and 61% in non manual workers
1 in 6 workers in the UK are experiencing depression, anxiety or stress at any given time
Only 17% of employers have any form of stress management advice & support in place.

What can an employer do to support their employees and reduce absenteeism or even presenteeism (the loss of productivity when an employee comes to work but functions at less than full capacity due to ill health)

Employee assistance programmes (EAPs)  – help Staff deal with life’s challenges. From Financial Stress, personal crisis and relationship problems, to health issues and work related conflicts.
Confidential life management and support services 24 hours a day 365 days a year
Telephone counselling, personal support, legal guidance for issues that cause anxiety or distress, bereavement assistance, medical information.
Online access and face to face counselling by qualified practitioners

Private Medical Insurance (PMI) – the Psychiatric element of a Private Medical Insurance Policy (PMI), often dismissed in this form of policy, can now be seen to be of considerable importance if long waiting lists for mental health treatment on the NHS are to be avoided.

Income protection – return to work assessments by nurses and qualified practitioners, once an employee is absent, help reduce the claims experience of the insurance company and so they work on behalf of both themselves & the employer  to help members be fit enough to return to work as soon as possible.

We are Independent, Whole of Market  Financial Advisers.  We offer advice in most areas but if we are unable to give the appropriate advice we will endeavour to put you in touch with  a relevant, qualified professional.  We would like to think that no query should be too small nor too big for us!

We are experienced and able to give both Personal Advice to  Individuals and Families. and Corporate Advice to Sole Traders, Limited Companies and Partnerships

Advisers:

Edwin Snapper Dip PFS Bingham, Nottingham, Tel 01949 836173, Mob 07768 505863.pdf

Tony Towers Cert PFS Bingham, Nottingham, Tel 01949 875283, Mob 07748 101530.pdf

Terence Connor, Coventry, Mob 07951 370 814 .pdf

Eamonn Watson Cert PFS Coventry, Tel 02476 672941, Mob 07905 671874.pdf

Head Office:

16 Swallow Drive, Bingham, Nottingham, NG13 8QA, Tel/Fax: 01949 836173,  email: info@veracityfp.co.uk
Veracity Financial Planning is a trading style of Edwin Snapper which is authorised and regulated by the Financial Services Authority

What do you want to do when you retire? Many of us want to take a well-earned rest, and do all the things we didn’t have time to do while we were working. The trouble is, many of these things – even the relatively cheap ones – cost money. If you want to enjoy your retirement, instead of spending your time worrying how you are going to pay the heating bills, you need to have money to live on… and a state pension won’t be enough.

You need to review your options now. You may think you’re too young to start thinking about a pension, but the longer you leave it, the more money you have to invest to get a reasonable pension back.

If you rely on the State Pension alone for your old age, unless you make additional contributions to a pension plan you are likely to be living on about £100/week in todays’ terms.

Based on an average of 7% growth to age 65, saving £100/Mth gross without increase and not taking inflation into account:

A 20 year old would have an additional income of approximately £16,800
A 30 year old would have an additional income of approximately £8,830
A 40 year old would have an additional income of approximately £4,500
A 50 year old would have an additional income of approximately £1,900

Obviously therefore, the sooner you make the decision to start taking pension contributions seriously the greater your income in retirement will be.

Reviewing your Pension:

Reviewing your pension is as important as starting a pension, a financial advisor should regularly review your pension plans to ensure that they continue to be appropriately invested in a changing market place.

£10,000 invested for 30 years at 4% avg growth – expected return £32,434
£10,000 invested for 30 years at 8% avg growth – expected return £100,627

There are so many different funds available out there, how do you know whether you are invested in the best funds for your needs, particularly where you have received tied advice and there is no comparison of what is being offered to what is available elsewhere.

So you want to retire…what do you need to do now?

When you want to retire you will need to decide whether to purchase an annuity and whether to purchase your annuity from your own pension provider or whether another provider will offer you a larger income instead of who you built up your fund with (this is your Open Market Option)

Alternatively you may decide to leave your funds invested and take income withdrawals from your fund, the later you purchase your annuity the more the annuity is likely to pay because the older you are the less time the annuity provider expects to have to pay an income from the fund – this may also allow some of the funds to be passed to your dependants on your death in contrast to purchasing an annuity, however the investment risk will stay with you rather than being passed to the annuity provider.

However, certainly under todays’, rules you are likely to have to purchase an annuity before age 75 as the income that can be taken and the capital that can be passed down is severely restricted after age 75.

A financial advisor can explain all of the options available to you, so you can make decisions that you are less likely to regret later.

* Sipps and Commercial Property Purchase are covered under Business Advice below.

Pensions and divorce

You will need to get professional advice about your pension (or your spouse’s pension) when you divorce. A pension is treated as an asset – and pension sharing allows a pension fund to be divided and transferred from one spouse to another as a final settlement achieving a clean break

“The value of your investment can fall as well as rise and you may get back less than you pay in.”

Our
 Advisers

 
Group Pensions, Death In Service, Group Income Protection, Private Medical Insurance, Shareholder Protection, Key Person Insurance,

All businesses need the best advice, most competitive premiums and up to date systems available in the marketplace for all employee benefits.
Business owners need to protect the value built up in their Companies, either to protect the company or to protect their family, often trusts are required.
We have access to the whole of the market and are experienced in advising both small and large businesses and helping to advise on the setting up and ongoing management of company plans.